I disagree, rather vehemently, with @grabiner on the "pay down mortgage fund" concept. If the rates rise, that Vanguard Long Term Tax Exempt fund would lose its NAV, badly. Every 1% rise in rates will cost 10% to 25% loss in NAV. And it will take 10 years to just get back to even. THEORETICALLY. If yet another rate hike happens in between those 10 years, it will take yet another 10 years from that second rate hike. Yada Yada.
Paying down the mortgage, on the other hand, GUARANTEES that the principal is paid down, meaning you will NOT see a loss in NAV. A sure fire guaranteed return versus a very nebulous perhaps possible return. If ever there is a real life example of "a bird in hand" aphorism, @grabiner's suggestion is it.
Paying down the mortgage, on the other hand, GUARANTEES that the principal is paid down, meaning you will NOT see a loss in NAV. A sure fire guaranteed return versus a very nebulous perhaps possible return. If ever there is a real life example of "a bird in hand" aphorism, @grabiner's suggestion is it.
Statistics: Posted by lakpr — Sun Nov 10, 2024 5:02 am